Schopp: Gear Up reviews didn't spot financial crimes
A cooperative that administered the federal Gear Up program in South Dakota had been under financial scrutiny for more than three years before state officials decided to revoke its contract.
But the state's top education official said Monday that her department never noticed signs of criminal activity during its reviews of Mid-Central Educational Cooperative.
“I didn’t think there was anything criminal," South Dakota Education Secretary Melody Schopp said in an interview.
The Department of Education began tracking what she described as "incompetence" with the group's financial record-keeping in early 2012. The department offered technical support to Mid-Central managers to help bring its accounting up to standards but became frustrated with the lack of improvement, Schopp said.
An investigation into potential criminal activity only surfaced in September, when the group's business manager, Scott Westerhuis, killed his wife and four children before setting fire to their Platte home and killing himself.
South Dakota Attorney General Marty Jackley has said a joint state and federal probe into the financial issues at Mid-Central is ongoing.
Auditor General Martin Guindon has said a 2015 audit of Mid-Central was completed and would be published following a review from the Department of Education. He said he planned to launch another probe into the group and others that had contracted with it.
Schopp said the state Department of Education in 2012 set up a system of checks and balances with the cooperative for submitting expenses. She said two members of her staff were specifically assigned to audit the group's receipts and to help the cooperative's leaders to better track spending.
“We knew it was incumbent on us to provide the technical support, knowing this grant had been in place for a number of years," Schopp said.
An attorney representing Mid-Central didn't immediately respond to a request for comment Monday.
Gear Up director says he was "marred"
Since fiscal year 2008 the cooperative received $11.1 million in direct federal funding and $19.1 million in other awards, according to federal spending data. The group also had several other contracts with the state Department of Education separate from the Gear Up grant.
Gear Up is a federal program aimed at helping high-poverty middle and high school students prepare for college. In South Dakota, it focused on Native Americans. One of the program's main features was a six-week summer camp at South Dakota School of Mines and Technology.
After about three years of working with Mid-Central staff on the problems, Schopp said her employees didn't see improvement in its work. A 2014 state legislative audit revealed ongoing problems, she said. Mid-Central employees weren't properly documenting work they'd done and the group continued to expense "unallowable' purchases.
"Those are some of the things that we just continued to have frustrations about," Schopp said.
A 2015 audit, which has yet to be published, echoed the findings, Schopp said.
Schopp said she contacted U.S. Department of Education officials in early September and was told the state could terminate its Gear Up contract with Mid-Central if they acted before Sept. 25. Federal officials recommended she find another group to administer the federal funds.
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Schopp said that was around the time she spoke to the South Dakota Board of Regents. When federal officials gave the state the "go ahead" to change administrators, she sent an email to Mid-Central's Director Dan Guericke requesting a meeting to talk about the future of the program.
Tony Venhuizen, chief of staff to Gov. Dennis Daugaard, said Monday that the state had long been aware of some of the issues occurring at Mid-Central.
“This entered the public eye with the cancellation of the contract and the fire," Venhuizen said. "But it’s really the end of the effort to make that happen."
Schopp said the department has since hired a full-time employee to oversee the Gear Up program in the state, which is now being administered by the Board of Regents.
Schopp also said Monday that she doesn't plan to resign her position. Legislators started a petition last week requesting that she step down.
"The last thing you do in good leadership is back away from problems instead of just stepping up and addressing them. And that’s what I intend to do, see this through,” Schopp said.
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